The Leader has been named the best large weekly newspaper in Arkansas. It has offices in Jacksonville and Cabot and covers north Pulaski County, Lonoke County and White County. The Leader is a family owned and operated newspaper that was founded in 1987.

Friday, May 27, 2011

TOP STORY >> Spending cuts proposed for solvency plan

By RICK KRON
Leader staff writer

Pulaski County School District has so many financial problems that it has developed a 35-point plan to combat all the shortcomings.

Anita Farver, the district’s chief financial officer, presented the plan Wednesday night. The school board made about a dozen changes or adjustments before approving the plan.

The plan comes on the heels of a scathing state audit of the district, numerous thefts, fraud and misappropriations and a general lack of financial control.

The latest includes the district having to pay $100,000 in penalties and interest for payroll taxes not paid on time to the IRS.

The district will also “monitor expenditures related to desegregation funding.” Not knowing where years of desegregation funding went is one of the reasons U.S. District Judge Brian Miller recently ordered a halt to $70 million in payments to the three county districts, included PCSSD.

Paying bills on time was a recurring problem through the 90-minute presentation by Farver.

According to information given at the meeting, the district pays 81 percent of its bills within 30 days, meaning it’s late on much of the rest and incurs additional fees.

“We’ve got to do better,” said board president Bill Vasquez. “We can’t be paying late fees with taxpayers’ money.”

Adding to the dilemma are too many bank accounts spread out without central control.

It seems each school in the district has its own activity account and makes deposits in whatever bank it wants —39 schools and 39 different bank accounts.

“It’s 2011,” said board member Sandra Sawyer. “We should be able to find one bank with branches in all our areas.”

The plan will rein in the various accounts and make it harder for abuse to occur.

The districts also recently revamped its cell phone contract, so it no longer has to pay roaming charges. It has also tightened rules for the use of the 100-plus cell phones the district has signed out.

Superintendent Dr. Charles Hopson said many of the problems were caused by 20 years of past practices. “A lot of past practices were loosely organized,” he said, and that has come back to bite the district.

The multi point plan calls for the finance office to highlight all purchases over $1,000 for the board to see without having to dig through reams and reams of paper. It also has more checks and balances, so items like a jet ski — Vasquez’s words — are not purchased.

Vasquez recommended the district set up a hotline, similar to what the Air Force has, to report fraud, waste and financial abuse. “It would be anonymous, of course, and we would get a report each month,” he told the board.

One thing the approved plan will do is generate a number of new and extra reports for the board to look at and question at each board meeting.

Two keys of the 10-page plan include setting a “tone at the top promoting a commitment to financial prudence” and to monitor all expenses to remain in the budget.

The plan also calls for discontinuing the use of blanket purchase orders, reconciling bank statements in a timely manner, and tighten and document employee travel reimbursement.

Payroll and accounting duties will be segregated or spread around to ensure no individual or department is either overspending or improperly spending funds.

Overtime hours will be monitored better. Farver said no one on contract will work overtime unless written approve has been obtained from human resources.

The district will also change its policy on checks it issues, going from 180 days for redemption to the industry standard of 90 days.

District inventory, particularly at the warehouse, will be checked more regularly, issuance and use of gift cards are now prohibited and the allowable uses of district credit cards will be tightened.